Beyond the Letter of the Treaties

This post addresses the question of how the Court of Justice of the European Union’s (the Court or CJEU) case-law on restrictive measures, specifically those against Russia, shapes the scope of its Common Foreign and Security Policy (CFSP) jurisdiction. European Union (the Union or EU) restrictive measures are sanctions adopted by the Council of the European Union (the Council) ‘against non-EU countries, non-state entities or individuals’ in response to emerging conflicts or ongoing crises. In order to answer this question, this post is divided into two parts. The first part recalls how the Court’s case-law on restrictive measures contributed to the constitutionalization of the CFSP through the extension of its jurisdiction in the matter. The second part presents the challenges posed by the most recent cases on EU sanctions and the possible implications of the Court’s responses.

Challenges and prospects for the EU legal order

The last few months have been extremely challenging for European justice as two cases concerning the CFSP have raised serious questions about the future architecture of the EU’s legal order. At a time when foreign and security policy issues, including defence, have become a major political priority for European leaders, (re-)defining the contours of judicial control over these highly sensitive dossiers is at least as much a legal issue as a political one. Hence, it is worth studying closely whether and how case-law could impact the breadth and depth of judicial review over the CFSP – and to which extent this could potentially impact the separation of powers, also across governance levels.

Aware of the EU’s intention to accede to the European Convention on Human Rights (ECHR), this question is an essential one as uncertainty about the limits of the CJEU’s jurisdiction in CFSP matters has been one of the reasons why this process has not yet been concluded. The constitutionalization of the CFSP by progressively limiting the immunity from legal review in this matter was the remedy for the Court to continue to live up to its own standards and pave the way for accession. However, the efforts of the Court seem to be undermined by the change of perspective on the CFSP in the light of the latest geopolitical events.

Prior to Russia’s annexation of Crimea in 2014, European leaders were more concerned with economic issues, but in recent years foreign policy issues have come to the fore. The Council’s increased attention to these issues can be described as a politicization of the CFSP, which is difficult to reconcile with the Court’s aspiration to constitutionalize this policy field (see, Moser & Rittberger, 2022).

Variations of the same question: how much say does the Luxembourg Court have over EU foreign policy?

Since the entry into force of the Treaty of Lisbon in 2009, the CFSP is governed by the same principles and values as the Union’s other policies (see, Cremona, 2012). Nonetheless, CFSP measures are excluded from the general jurisdiction of the Court under Article 19 of the Treaty on European Union (TEU).

On the one hand, the CFSP is subject to the rule of law, the essence of which is the effective judicial protection of individuals whose fundamental rights have allegedly been infringed in the area of the CFSP. On the other hand, the Court cannot automatically apply these constitutional principles, including fundamental rights, and cannot declare that it has jurisdiction in the field if the Treaty clearly states that it does not. It is worth noting that this paradox has not ceased to challenge European judges in recent years.

A narrow interpretation of the CFSP jurisdictional carve-out in Articles 24(1) TEU and 275 TFEU

CJEU’s jurisdiction in CFSP matters is seriously limited under the second subparagraph of Article 24(1) TEU and the first paragraph of Article 275 of the Treaty on the Functioning of the European Union (TFEU). However, this jurisdictional carve-out has its exceptions in the last sentence of the second subparagraph of Article 24(1) TEU and the second paragraph of Article 275 TFEU, also known as the claw-back provisions. The claw-back can be defined as the limited judicial review of certain CFSP acts.

The Court has only jurisdiction to monitor compliance with the mutual non-affectation clause contained in Article 40 TEU (policy delimitation preventing measures from being adopted on the basis of an inadequate treaty basis, that is either the TEU for CFSP measures or the TFEU for other external action strands) and to review the legality of decisions imposing restrictive measures under the second paragraph of Article 275 TFEU.

Following the invasion of Crimea, the Council sought to put pressure on Russia by adopting a series of restrictive measures against key individuals and economic entities. Among these entities was Rosneft, a state-owned oil and gas company, which brought an action for annulment, under Article 263 TFEU, against the Council decision and regulation sanctioning it and, separately, an action for review of legality before the High Court of Justice of the United Kingdom. For reasons of uniformity of EU law, the latter court asked the CJEU whether it had jurisdiction, under Article 267 TFEU, to give a preliminary ruling on the validity of a CFSP act, such as Decision 2014/512/CFSP.

In the name of the rule of law, a founding value of the EU, the Court held that those persons affected by restrictive measures must be able to challenge the validity of CFSP acts that directly affect their individual rights.

Although Article 47 of the EU Charter of Fundamental Rights itself does not confer jurisdiction on the CJEU where there is none, the principle of effective judicial protection nevertheless requires that this jurisdictional carve-out should not be interpreted literally, but rather in a harmonious and holistic manner. Rosneft, known as a landmark claw-back case, offered the opportunity to extend the Court’s jurisdiction to preliminary rulings on the validity in relation to restrictive measures.

However, this expansionist perspective also has its problems (see, Moser & Rittberger, 2022). On the one hand, this extension of the Court’ jurisdiction through its case-law represents a progressive constitutionalization of the CFSP. The Court approaches a teleological interpretation of primary law, by which it is bringing the CFSP more within the scope of the EU values and principles.

On the other hand, the current crises reinforce the politicization of the CFSP at an even higher level. While seeking constitutionalization and bringing the CFSP closer to the rest of EU policies, the Court has avoided ruling on purely political CFSP decisions, which belong to the Member States and the Council.

The doubtful further juridification of the European Union’s foreign policy, now a reality

After progressively expanding its CFSP jurisdiction, new horizons are opening up for the CJEU. Its long-awaited ruling in the Neves 77 Solutions case, triggered by a preliminary reference drafted by the Regional Court of Bucharest, marks a turning point for the scope of the judicial review of foreign policy.

Neves 77 Solutions is a brokerage company active in the aviation product sales sector, which was fined approximately 6,000 euros by the Romanian National Tax Administration Agency (ANAF). Moreover, ANAF confiscated from Neves approximately 3 million euros. These measures were taken because Neves received these funds following a brokerage transaction in which Russian-made radio sets were sold by Neves to an Indian company. This transaction was considered to have violated the EU’s restrictive measures against Russia, introduced by the Council Decision 2014/512/CFSP. In this context, the Romanian appellate court, which heard the case, decided to refer three questions to the CJEU, under Article 267 TFEU, on the interpretation of the aforementioned CFSP decision. This case raises a new issue, namely whether the CJEU has jurisdiction to hear a preliminary ruling on the interpretation of a CFSP decision.

Opinion of Advocate General Ćapeta

The end of 2023 was marked by the publication of Advocate General Ćapeta’s opinion on this case. Her position on the inappropriateness of a further extension of the Court’s jurisdiction is worth studying, especially since her opinion sharply contrasts with that delivered in the KS and KD case. In her view, the authors of the EU Treaties wanted to avoid transforming the CJEU into a CFSP policymaker, once it had the discretion to choose among various interpretations of a legal rule. In contrast to a review of lawfulness, in which the Court is bound by the interpretation of the measure given by its author, in a preliminary ruling on interpretation, the meaning of the provision is unclear and needs to be established. Therefore, unlike preliminary references on validity, preliminary rulings on interpretation should not be subject to the claw-back exception. A potential request for interpretation would imply that the CJEU would be exercising control over foreign policy, which is a strategic, political and sensitive area.

Nevertheless, it is difficult to draw a very clear distinction between assessing the validity of a measure and its interpretation. According to the Advocate General Wathelet in Rosneft, if the Court can do more, namely to review the legality of a CFSP decision, it can certainly do less, namely to interpret its terms. In the latter opinion, the Advocate General cites the Busseni case, in which the Court affirmed that the assessment of the validity of a measure also involves its interpretation.

Notwithstanding the fact that it does not concern restrictive measures, as indicated above, the opinion of Advocate General Ćapeta in Neves differs from that in KS and KD in which she proposes that the CJEU should affirm its jurisdiction to cover actions for damages caused by its Common Security and Defence Policy (CSDP) missions in breach of fundamental rights.

Judgement of the Grand Chamber of the Court of Justice of the European Union

Seeking to privilege the unity of the EU’s legal order and legal certainty, the Court developed an original reasoning in Neves. In that regard, the Court recalled that, under Article 215(1) TFEU, the Council is obliged to take the necessary measures to give effect to a CFSP decision on the interruption or reduction of economic or financial relations with third countries. One such measure is the adoption of a regulation aimed at giving effect to a CFSP decision and which is susceptible to interpretation by the Court. In the present case, however, the Court, aware of the Council’s delay in fulfilling the abovementioned obligations arising from the Treaty, decided to declare that it had interpretative jurisdiction in respect of the provisions which should have been included in the Council’s regulation. More specifically, the Court affirmed its jurisdiction to give a preliminary ruling on the interpretation of an EU act containing measures which should have been implemented by the Council and which constitute a legal basis for sanctions imposed at national level, such as Decision 2014/512, which was challenged by the Romanian referring court.

The CJEU also emphasized that such a narrow interpretation of its jurisdictional carve-out ensures a consistent system of judicial protection which is essential for the respect of the rule of law. Reading this landmark decision in parallel with the one in the Rosneft case cited above, it can be observed how the Court asserted its jurisdiction to give a preliminary ruling on both the validity and the interpretation of a CFSP act imposing restrictive measures exclusively through its case-law (see, Sarmiento & Iglesias Sánchez, 2024).

As far as KS and KD is concerned, the Court affirmed its jurisdiction to assess the legality of, or interpret, only those acts or omissions that are not related to ‘political or strategic choices’ made in the context of the CFSP or the CSDP (for a comment on the judgment, see Vandenbosch in this blog symposium). Roughly speaking, the Court considered that a damages action provoked by EURLEX Kosovo’s alleged omissions does not necessarily fall within the scope of policy choices.

Final reflections

As part of its efforts to accede to the ECHR, the CJEU has progressively extended its jurisdiction to ensure that the CFSP does not fall within the jurisdiction of the European Court of Human Rights (ECtHR). A literal application of the limitations imposed on the CJEU in CFSP matters would mean that, after accession, the ECtHR would have jurisdiction in EU foreign policy issues, which would seriously undermine the autonomy of the Union’s legal order (see Butler, 2023).

Furthermore, one cannot help but notice that the Court has an increasing aspiration to be the sole judicial organ competent to rule over CFSP, also to the detriment of national courts. The fact that the Court asserted its interpretative jurisdiction over EU acts imposing restrictive measures confirms that we are witnessing a ‘normalisation’ of the CFSP, as described by several scholars (see, Butler, 2019 or Moser & Rittberger, 2022). Such a process implies a dilution of the distinctive character of the CFSP by bringing this area under the jurisdiction of the CJEU and subjecting it to EU law (see, Lonardo, 2021).

Even in such a scenario, much remains to be done for the CFSP. Although the Court has now made considerable progress in constitutionalizing the CFSP, Treaties cannot be neglected. The current wording of the Treaties does not allow a full reconciliation between the Union’s increasingly ambitious defence and security objectives and the Court’s aspiration to bring the CFSP under its jurisdiction and to completely unblock the negotiations on EU’s accession to the ECHR. In order not to undermine the principle of the separation of powers, a reform of EU governance should therefore be undertaken in the coming years.